S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  7535--A
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               May 25, 2023
                                ___________
 
 Introduced  by  M. of A. GUNTHER, WEPRIN, BUTTENSCHON, ZEBROWSKI, STECK,
   McDONALD, STERN, THIELE, DINOWITZ,  FAHY,  HUNTER,  WOERNER,  McMAHON,
   JACKSON,  RIVERA,  BENEDETTO,  WALLACE,  STIRPE,  J. A. GIGLIO, JONES,
   ZACCARO, DE LOS SANTOS, BURKE, BERGER -- Multi-Sponsored by --  M.  of
   A.  SIMON -- read once and referred to the Committee on Transportation
   -- recommitted to the Committee on Transportation in  accordance  with
   Assembly Rule 3, sec. 2 -- committee discharged, bill amended, ordered
   reprinted as amended and recommitted to said committee
 
 AN ACT to amend the vehicle and traffic law, in relation to establishing
   an online insurance verification system for motor vehicle insurance
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1.  Subdivisions 2, 3 and 4 of section 313 of the vehicle  and
 traffic  law,  subdivision  2  as  amended by chapter 678 of the laws of
 1997, paragraphs (a), (b) and (d) of subdivision 2 and subdivision 4  as
 amended by chapter 509 of the laws of 1998, paragraph (b) of subdivision
 4 as amended by chapter 161 of the laws of 2004, paragraph (d) of subdi-
 vision  4  as  further amended by section 104 of part A of chapter 62 of
 the laws of 2011, subdivision 3 as amended by chapter 781 of the laws of
 1983, are amended to read as follows:
   2. (a) [Upon] EXCEPT AS OTHERWISE PROVIDED IN SECTIONS  THREE  HUNDRED
 TWELVE-B  AND THREE HUNDRED TWELVE-C OF THIS ARTICLE, the termination of
 an owner's policy of liability insurance, other than an  owner's  policy
 of  liability  insurance for a motorcycle, at the request of the insured
 or by cancellation by the insurer, the insurer shall file  a  notice  of
 termination  with  reference  to  such policy, as opposed to any insured
 vehicle or vehicles under such policy, with the commissioner  not  later
 than  thirty  days  following the effective date of such cancellation or
 other termination, in accordance with the regulations required by  para-
 graph  (c)  of  this  subdivision. An insurer shall not file a notice of
 termination with the commissioner except as required  by  this  subdivi-
 sion.
   (b)  [Upon]  EXCEPT  AS  OTHERWISE  PROVIDED IN SECTIONS THREE HUNDRED
 TWELVE-B AND THREE HUNDRED TWELVE-C OF THIS ARTICLE, UPON  the  issuance
 
              

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10946-04-4
 A. 7535--A                          2
 
 of  an  owner's  policy  of liability insurance the insurer shall file a
 notice or confirmation of issuance with reference  to  such  policy  not
 later  than fourteen days following the effective date of such issuance,
 and  not later than seven days following the effective date for policies
 issued after January first, two thousand one,  in  accordance  with  the
 regulations required by paragraph (c) of this subdivision.
   (c)  The commissioner shall promulgate regulations establishing proce-
 dures for issuance of  proof  of  insurance  and,  EXCEPT  AS  OTHERWISE
 PROVIDED  IN  SECTIONS THREE HUNDRED TWELVE-B AND THREE HUNDRED TWELVE-C
 OF THIS ARTICLE, for reporting by insurers of notices of termination and
 policy issuance, either electronically or by paper copy, at  the  option
 of  the  department. Such reporting OR, IF REQUIRED PURSUANT TO SECTIONS
 THREE HUNDRED TWELVE-B AND THREE HUNDRED TWELVE-C OF THIS ARTICLE,  SUCH
 ONLINE  VERIFICATION  shall be required for every cancellation or termi-
 nation which is effective on  or  after  July  first,  nineteen  hundred
 eighty-four and for every policy issuance which is effective on or after
 January first, two thousand[; provided, however, that should the commis-
 sioner  find,  after  testing  of reporting procedures, that it would be
 feasible to require reporting for policy cancellations, terminations  or
 issuances  effective on an earlier date, he may by regulation so require
 reporting on such earlier date, but  in  no  event  shall  reporting  be
 required  for  cancellations or terminations effective prior to February
 first, nineteen hundred eighty-four nor for policy  issuances  effective
 prior  to  September first, nineteen hundred ninety-nine. Insurers shall
 cooperate fully with the commissioner in any such testing  of  reporting
 procedures].
   (d)  Upon  application  by an insurer, the commissioner may extend the
 period for filing of notices of termination by such insurer PURSUANT  TO
 PARAGRAPH  (C) OF THIS SUBDIVISION for up to fifteen days, and for seven
 days for policies issued by an insurer.  Extensions shall not be granted
 unless the insurer demonstrates to the satisfaction of the  commissioner
 that compliance with the notice period would result in substantial hard-
 ship  to  the  insurer. The commissioner shall maintain a list of exten-
 sions granted pursuant to this paragraph.
   (E) NOTWITHSTANDING THE PROVISIONS OF PARAGRAPHS (B), (C) AND  (D)  OF
 THIS  SUBDIVISION,  THE  COMMISSIONER MAY, IN LIEU OF PROMULGATING REGU-
 LATIONS FOR REPORTING BY INSURERS TO THE DEPARTMENT OF NOTICES OF TERMI-
 NATION AND POLICY ISSUANCE EITHER ELECTRONICALLY OR BY PAPER COPY PURSU-
 ANT TO SUCH PARAGRAPHS,  PROMULGATE  REGULATIONS  PURSUANT  TO  SECTIONS
 THREE HUNDRED TWELVE-B AND THREE HUNDRED TWELVE-C OF THIS ARTICLE ESTAB-
 LISHING  PROCEDURES FOR ONLINE VERIFICATION BY MOTOR VEHICLE INSURERS OF
 MOTOR VEHICLE OWNERS' POLICIES OF LIABILITY INSURANCE TO THE DEPARTMENT.
   3. A cancellation or termination for which notice is  required  to  be
 filed  with the commissioner pursuant to subdivision two of this section
 OR WHICH MUST BE VERIFIED ONLINE  PURSUANT  TO  SECTIONS  THREE  HUNDRED
 TWELVE-B  AND THREE HUNDRED TWELVE-C OF THIS ARTICLE shall not be effec-
 tive with respect to persons other than the named insured and members of
 the insured's household until the insurer has  filed  a  notice  thereof
 with  the  commissioner  OR  VERIFIED  SUCH  CANCELLATION OR TERMINATION
 ONLINE, AS APPLICABLE, or until another insurance  policy  covering  the
 same risk has been procured, except that a notice filed with the commis-
 sioner,  in the format prescribed by the commissioner, within the period
 prescribed in subdivision two of this section, OR  A  VERIFICATION  MADE
 ONLINE  IN  COMPLIANCE  WITH  SECTIONS  THREE HUNDRED TWELVE-B AND THREE
 HUNDRED TWELVE-C OF THIS ARTICLE, shall be  effective  as  of  the  date
 certified  therein,  regardless  of whether a suspension order is issued
 A. 7535--A                          3

 pursuant to section three hundred eighteen of this  article.  A  receipt
 from  the department stating that a notice of termination has been filed
 shall be deemed conclusive evidence of such  filing.  An  insurer  shall
 cooperate with the commissioner in attempting to identify persons not in
 compliance  with this article in cases where the information reported by
 the insurer does not correspond with records maintained by  the  depart-
 ment.
   4.  Notwithstanding any other provision of this article to the contra-
 ry, the commissioner shall establish a [pilot] program  to  maintain  an
 up-to-date  insured vehicle identification database to assist in identi-
 fying uninsured motor  vehicles.  Such  [databases]  DATABASE  shall  be
 implemented  by  the  department pursuant to standards prescribed by the
 commissioner or an agent designated by the commissioner which shall seek
 technical assistance from affected insurers and the New York  Automobile
 Insurance  Plan.  This  program  shall utilize all information collected
 pursuant to this section OR PURSUANT TO SECTIONS THREE HUNDRED  TWELVE-B
 AND  THREE  HUNDRED  TWELVE-C OF THIS ARTICLE and shall also include the
 following elements:
   (a) In addition to and in conjunction with EITHER  the  provisions  of
 subdivision  two  of  this  section  OR THE PROVISIONS OF SECTIONS THREE
 HUNDRED TWELVE-B AND THREE HUNDRED TWELVE-C OF  THIS  ARTICLE,  insurers
 that  write  private  passenger or commercial motor vehicle insurance in
 this state shall also submit to the  department,  either  electronically
 [or],  by  paper  copy  OR, IF ESTABLISHED PURSUANT TO THE PROVISIONS OF
 SECTION THREE HUNDRED TWELVE-B OF THIS ARTICLE, BY ONLINE  VERIFICATION,
 at the option of the department, information that identifies those poli-
 cies  that  have been cancelled, terminated or non-renewed and all poli-
 cies that have been issued, the date when such insurance lapses, and any
 other information that the commissioner deems necessary  to  efficiently
 identify   and  track  uninsured  vehicles  in  this  state  such  as  a
 policyholder's address, policy number, vehicle registration number,  and
 vehicle  identification  number.  The  department  may  exempt from such
 [pilot] program the transfer of information on  certain  classifications
 of  vehicles that are in the opinion of the department generally insured
 and which it is difficult to identify  uninsured  vehicles  within  such
 classification, such as large commercial vehicle fleets;
   (b)  [The]  EXCEPT  AS  OTHERWISE  PROVIDED  IN  SECTION THREE HUNDRED
 TWELVE-B OF THIS ARTICLE, THE department shall  forward  to  each  motor
 vehicle  insurer,  at  such times as deemed necessary and appropriate by
 the commissioner, a listing of all the registrants the department has on
 file as insured with that insurer. Such insurer shall  then  review  the
 listing  within  thirty days of receipt of the listing and report to the
 department which of the registrants the insurer does not insure;
   (c) The commissioner shall, in conjunction with the superintendent  of
 state  police  and  local law enforcement officials formulate a means to
 allow such database ESTABLISHED PURSUANT TO THIS SUBDIVISION to be easi-
 ly accessible to on-duty law enforcement personnel in the performance of
 their official duties for the purpose of verifying whether  an  operator
 maintains  proper insurance coverage and to increase compliance with the
 motor vehicle financial security laws under  this  article  and  article
 eight of this title;
   (d) In developing the mechanism to electronically transfer information
 to  the  department  PURSUANT  TO  THIS  SECTION OR, AT THE DEPARTMENT'S
 OPTION, PURSUANT TO SECTIONS THREE HUNDRED TWELVE-B  AND  THREE  HUNDRED
 TWELVE-C OF THIS ARTICLE, the commissioner shall consult with the super-
 intendent  of  financial  services  and insurers to adopt a standardized
 A. 7535--A                          4

 system of organizing, recording and transferring such information so  as
 to  minimize  insurer administrative expenses. The commissioner shall to
 the maximum extent possible  utilize  nationally  recognized  electronic
 data  information  systems  such  as  those  developed  by  the American
 National Standards Institute or the American Association of Motor  Vehi-
 cle Administrators;
   (e)(1) Either simultaneously or after the up-dated database system has
 been  established,  the  commissioner shall develop a computer indicator
 that can be imprinted on a vehicle registration sticker or on a  sticker
 to  be  affixed  to  the  insured's license plate. Such indicator system
 shall enable law enforcement personnel and other authorized persons when
 acting in the course of their official duties to access the department's
 database so that such persons can ascertain whether a vehicle is proper-
 ly insured or not insured;
   (2) Such computer indicator system shall enable authorized persons  in
 the  performance  of their official duties to access information such as
 the registrant's name, vehicle identification number, name  of  insurer,
 current  status  of  insurance,  vehicle  registration  number and other
 information that the  commissioner  deems  necessary  to  implement  the
 provisions  of  this  section  OR SECTION THREE HUNDRED TWELVE-B OF THIS
 ARTICLE.  The commissioner in developing such computer indicator  system
 shall  enable  authorized  persons  in the performance of their official
 duties to access only such information that is necessary to detect unin-
 sured motor vehicles or accomplish other goals clearly  established  and
 authorized  by  law. Such computer indicator system shall be designed to
 protect the personal privacy interests of motorists;
   (f) The commissioner shall maintain [an] THE insured vehicle  database
 system  [that  is  accurate  to within a period of fourteen days] ESTAB-
 LISHED PURSUANT TO THIS SUBDIVISION  and  a  computer  indicator  system
 described  in  paragraph  (e)  of  this  subdivision [within twenty-four
 months of the effective date of this subdivision and] THAT ARE  ACCURATE
 to  within  seven  days [by January first, two thousand one. The commis-
 sioner shall submit to the legislature a report within  eighteen  months
 from  the date this subdivision takes effect which outlines the progress
 being made to implement such database  and  computer  indicator  system.
 After such database and computer indicator system is established and put
 into  operation,  the  commissioner  shall  make  recommendations to the
 legislature to alter, minimize or eliminate the need for the issuance of
 insurance identification cards, simplify the requirements to demonstrate
 proof of financial  security  and  certificate  of  insurance  currently
 required  by  this  article, eliminate the requirement for production of
 proof of financial security to accompany applications for  registrations
 or  renewals  thereof  provided  that  such  database indicates that the
 registrant is insured, and the repeal or modification of  section  three
 hundred  twelve-a  of  this  article.  The  commissioner shall also make
 recommendations to the legislature to streamline and shorten the  notice
 termination  requirements  of  subdivisions  one,  two and three of this
 section and section three hundred eighteen of this article. Such  report
 shall be submitted to the legislature within twelve months from the date
 such database and indicator system has been implemented];
   (g)  [To  minimize  the  cost of this program, the commissioner, if he
 deems it necessary and prudent, can initially limit the  scope  of  this
 project to a select number of vehicle classifications or insurers;
   (h)]  Notwithstanding any other provision of law, information obtained
 by the department pursuant to this section AND  SECTIONS  THREE  HUNDRED
 TWELVE-B  AND  THREE  HUNDRED  TWELVE-C  OF  THIS  ARTICLE  shall not be
 A. 7535--A                          5
 
 disclosed, used, sold, accessed, utilized in any manner or  released  by
 the  department  to  any person, corporation, or state and local agency,
 except in response to a specific, individual request for  such  informa-
 tion  authorized pursuant to the federal driver's privacy protection act
 (18 U.S.C. 2721 et.seq.). The department  shall  institute  measures  to
 ensure  that only authorized persons are permitted to access such infor-
 mation for the purposes specified by  this  section  AND  SECTION  THREE
 HUNDRED  TWELVE-B  OF  THIS  ARTICLE.   Persons who knowingly release or
 disclose information from such database for a purpose other  than  those
 described  as  authorized by this section or to a person not entitled to
 receive it shall be guilty of a misdemeanor for  each  such  release  or
 disclosure[; and
   (i)  The  commissioner may postpone implementation of such pilot data-
 base and computer indicator system for a period of time  not  to  exceed
 eighteen  months  if  he or she determines that the program is not ready
 for implementation. Should the commissioner determine that  such  system
 cannot  be  implemented  during  the eighteen months extension, then the
 commissioner shall report  to  the  legislature  the  reasons  why  such
 program  cannot  be  implemented  and request that the law be amended to
 delay its implementation date].
   § 2. The vehicle and traffic law is amended by adding  a  new  section
 312-b to read as follows:
   §  312-B. ONLINE INSURANCE VERIFICATION SYSTEM OF MOTOR VEHICLE INSUR-
 ANCE. 1. THE COMMISSIONER MAY ESTABLISH A SYSTEM FOR THE ONLINE  VERIFI-
 CATION  OF MOTOR VEHICLE OWNERS' POLICIES OF LIABILITY INSURANCE. INFOR-
 MATION AVAILABLE IN THE ONLINE INSURANCE VERIFICATION  SYSTEM  SHALL  BE
 PROVIDED TO THE COMMISSIONER BY MOTOR VEHICLE INSURERS PURSUANT TO RULES
 AND  REGULATIONS  PROMULGATED  BY  THE COMMISSIONER, IF THE COMMISSIONER
 DETERMINES ESTABLISHMENT OF SUCH SYSTEM WOULD FURTHER  THE  PURPOSES  OF
 THIS  ARTICLE  AS  SET FORTH IN SUBDIVISION TWO OF SECTION THREE HUNDRED
 TEN OF THIS ARTICLE.
   2. WHERE THE COMMISSIONER ESTABLISHES A SYSTEM FOR THE ONLINE  VERIFI-
 CATION  OF  OWNERS'  POLICIES  OF  LIABILITY  INSURANCE PURSUANT TO THIS
 SECTION, THE COMMISSIONER SHALL VERIFY MOTOR VEHICLE OWNERS' POLICIES OF
 LIABILITY INSURANCE AND MAINTAIN SUCH SYSTEM OF ONLINE  VERIFICATION  OF
 OWNERS'  POLICIES  OF  LIABILITY  INSURANCE THAT IS ACCURATE TO WITHIN A
 PERIOD OF NO LESS THAN SEVEN DAYS, AND  SHALL  DEVELOP,  IMPLEMENT,  AND
 MAINTAIN SECURITY FEATURES TO PROTECT THE SECURITY, CONFIDENTIALITY, AND
 INTEGRITY  OF  SUCH SYSTEM'S INFORMATION AND DATA AND PROVIDE SAFEGUARDS
 NECESSARY OR APPROPRIATE TO PRECLUDE UNAUTHORIZED ACCESS TO SUCH  INFOR-
 MATION AND DATA.
   3.  THE ONLINE INSURANCE VERIFICATION SYSTEM SHALL, AT A MINIMUM, HAVE
 THE ABILITY:
   (A) FOR THE DEPARTMENT TO SEND REQUESTS TO MOTOR VEHICLE INSURERS  FOR
 VERIFICATION  OF EVIDENCE OF A MOTOR VEHICLE OWNER'S POLICY OF LIABILITY
 INSURANCE AS PRESCRIBED BY THIS CHAPTER VIA WEB  SERVICES,  THROUGH  THE
 INTERNET,  OR A SIMILAR PROPRIETARY OR COMMON CARRIER ELECTRONIC SYSTEM,
 AS WELL AS TO  RECEIVE  FROM  MOTOR  VEHICLE  INSURERS  VERIFICATION  OF
 EVIDENCE  OF  A MOTOR VEHICLE OWNER'S POLICY OF LIABILITY INSURANCE IN A
 FORM AND MANNER AS DETERMINED BY THE COMMISSIONER;
   (B) TO BE UTILIZED BY THE COMMISSIONER FOR VERIFICATION  OF  MANDATORY
 MOTOR  VEHICLE  LIABILITY INSURANCE COVERAGE AS PRESCRIBED BY THIS CHAP-
 TER;
   (C) TO ENABLE THE COMMISSIONER TO  MAKE  INQUIRIES  TO  MOTOR  VEHICLE
 INSURERS  FOR  EVIDENCE  OF  MOTOR VEHICLE OWNERS' POLICIES OF LIABILITY
 INSURANCE INCLUDING, BUT NOT LIMITED TO, POLICYHOLDERS' ADDRESSES, POLI-
 A. 7535--A                          6
 
 CY NUMBERS, VEHICLE REGISTRATION  NUMBERS,  AND  VEHICLE  IDENTIFICATION
 NUMBERS;
   (D)  TO  RESPOND TO EACH REQUEST BY THE COMMISSIONER FOR MOTOR VEHICLE
 LIABILITY INSURANCE INFORMATION WITHIN AN AMOUNT OF TIME  DETERMINED  BY
 THE COMMISSIONER; AND
   (E) TO RESPOND WITHIN THE TIME ESTABLISHED.
   4.  IF  THE   COMMISSIONER IMPLEMENTS AN ONLINE INSURANCE VERIFICATION
 SYSTEM PURSUANT TO THIS SECTION, SUCH SYSTEM (A) SHALL NOT BE ACCESSIBLE
 EXCEPT TO THE COMMISSIONER AND TO INSURERS TO THE  EXTENT  NECESSARY  TO
 COMPLY  WITH  THE  PROVISIONS  OF THIS SECTION AND SECTION THREE HUNDRED
 TWELVE-C OF THIS ARTICLE, AND (B) SHALL UNDERGO AN  APPROPRIATE  TESTING
 AND  PILOT  PERIOD  OF  NOT  LESS  THAN ONE YEAR AFTER WHICH, SHOULD THE
 COMMISSIONER DETERMINE TO PROCEED WITH SUCH ONLINE  INSURANCE  VERIFICA-
 TION  SYSTEM, THE COMMISSIONER SHALL CERTIFY IN WRITING TO THE GOVERNOR,
 THE TEMPORARY PRESIDENT OF THE SENATE, AND THE SPEAKER OF  THE  ASSEMBLY
 THAT SUCH SYSTEM IS FULLY OPERATIONAL.
   §  3.  The  vehicle and traffic law is amended by adding a new section
 312-c to read as follows:
   § 312-C. INSURER RESPONSIBILITIES FOR THE ONLINE  INSURANCE  VERIFICA-
 TION  SYSTEM.    WHERE AN ONLINE INSURANCE VERIFICATION SYSTEM IS ESTAB-
 LISHED PURSUANT TO SECTION THREE HUNDRED TWELVE-B OF THIS ARTICLE:
   1. EVERY MOTOR VEHICLE INSURER SHALL  PROVIDE  THE  COMMISSIONER  WITH
 ACCESS  TO  ITS MOTOR VEHICLE LIABILITY INSURANCE POLICY STATUS INFORMA-
 TION AS PROVIDED BY, AND CONSISTENT WITH ANY TIME FRAMES ESTABLISHED BY,
 ANY RULES AND REGULATIONS PROMULGATED BY THE COMMISSIONER; AND
   2. EVERY INSURER THAT IS LICENSED TO  ISSUE  MOTOR  VEHICLE  INSURANCE
 POLICIES OR IS AUTHORIZED TO DO BUSINESS IN THIS STATE SHALL COMPLY WITH
 THIS  SECTION  AND  SECTION  THREE  HUNDRED TWELVE-B OF THIS ARTICLE FOR
 VERIFICATION OF EVIDENCE OF MOTOR VEHICLE LIABILITY INSURANCE FOR  EVERY
 VEHICLE INSURED BY THAT INSURER IN THIS STATE, AS REQUIRED BY THIS CHAP-
 TER AND THE RULES AND REGULATIONS PROMULGATED BY THE COMMISSIONER THERE-
 UNDER.
   §  4. Paragraph (d) of subdivision 3 of section 317 of the vehicle and
 traffic law, as added by chapter 678 of the laws of 1997, is amended  to
 read as follows:
   (d)  To  fully  fund such [pilot] database system and bar code program
 established pursuant to subdivision four of section three hundred  thir-
 teen  of  this  article AND, WHERE ESTABLISHED PURSUANT TO SECTION THREE
 HUNDRED TWELVE-B OF THIS ARTICLE,  SUCH  ONLINE  INSURANCE  VERIFICATION
 SYSTEM,  the  commissioner  shall utilize the following three sources of
 revenue: (1) twenty-five percent of all  civil  penalties  imposed  upon
 persons  fined pursuant to paragraph (b) of subdivision one-a of section
 three hundred eighteen of this article, (2) monies obtained from  grants
 that may be awarded to the commissioner from the motor vehicle theft and
 insurance  fraud  prevention fund, and (3) pro rata assessments upon all
 insurance carriers subject to the provisions of this section in  propor-
 tion to the premium estimates filed by such carriers.
   § 5. This act shall take effect on the one hundred twentieth day after
 it shall have become a law.  Effective immediately, the addition, amend-
 ment and/or repeal of any rule or regulation necessary for the implemen-
 tation  of this act are authorized to be made and completed on or before
 such effective date.